Michael Creed (Cork North West, Fine Gael)
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Question 205: To ask the Minister for Agriculture, Fisheries and Food the position regarding the decline in sheep, lamb and ewe numbers on an annual basis since 1998, the reduction in lamb slaughtering and value of exports and the financial returns crisis in the sheep sector; the action he will take in regard to same; the proposals he has to reverse the income decline in sheep farming; the measures he will negotiate as part of the CAP health check at EU level prior to the end of 2008; and if he will make a statement on the matter. [37626/08]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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The table sets out information on the sheep sector since 1998. The difficulties facing the sheep sector have been apparent for some time and prompted the setting up of the Sheep Strategy Development Group. The Strategy Group's report contained a number of recommendations for action to secure the future of the sector.

Considerable progress has been by my Department in implementing the recommendations in the report within its remit. These include drawing up a revised pedigree breed improvement scheme and an interim board has been established to oversee the project. Trials have been conducted on the feasibility of introducing mechanical grading for lamb carcasses. An additional supplementary measure to promote mixed grading and assist sheep farmers has been introduced under REPS 4; a lamb quality assurance scheme has been introduced and Bord Bia have strengthened their efforts to promote lamb on the home and export markets. Teagasc has developed a new sheep programme to improve the management and husbandry of flocks.

All these actions are geared to improving quality and some, of their nature, will take time for the benefits to accrue. An important element is agreement by the processors and farmers representatives to agree on a pricing grid with a base price for a certain quality and bonuses or penalties for variations from this. The introduction of such an agreed grid would bring clarity to the market and would enable producers to see that quality is being rewarded across the board. It is hoped that agreement can be reached on the issue in the near future.

The decline in the Irish sheep sector is not an isolated phenomenon. Indeed, similar declines are evident in most of the sheep-producing countries of Europe. European production is predicted to fall a further 2% this year. There is a deficit of 300,000 tonnes which is mainly filled by imports from New Zealand which has an annual quota of 228,000 tonnes.

The problems facing the sheep sector are well known at EU level. My predecessor had them discussed at the EU Agriculture Council of Ministers in March. This was followed by the Aylward Report to the European Parliament and a conference hosted by the French Presidency of the EU in September. These initiatives have kept the sheep sector's concerns to the forefront and, in the context of the current "CAP Health Check" discussions, I continue to pursue possible solutions.

Michael Creed (Cork North West, Fine Gael)
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Question 206: To ask the Minister for Agriculture, Fisheries and Food the number of farms and the amount of money paid out under the various aspects of the sheep package announced by him in May 2007; and if he will make a statement on the matter. [37627/08]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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The series of measures announced in May 2007 were in response to the recommendations of the Sheep Strategy Development Group. They form a comprehensive package to address the opportunities and challenges that lie ahead. The following sets out progress on the measures.

REPs

Sheep farmers continue to be major beneficiaries under the scheme and account for some 22,500 participants. Payments made to them in 2007 totalled some €332m. In relation to the new mixed grazing supplementary measure, €9,000 has been paid in respect of REPs 4 contracts commencing in 2007. Some 11,600 applications for REPS 4 with 2008 commencement dates were received in my Department by the closing date of 15 May, 2008. These are currently being processed and it is not possible to say what the cost of the mixed grazing supplementary measure in respect of 2008 will be at this stage.

Single Farm Payment / National Reserve

The sheep sector also continues to benefit from the single farm payment. While that payment is decoupled, it incorporates the previous ewe premium, which ceased in 2004. Ewe premia totalled €107.5m in that year. Under the 2005 National Reserve some 500 hill sheep farmers will benefit by €400,000 annually or €2.8m over the period until 2012. In addition, a special category was included under the 2007 National Reserve for sheep farmers whose existing Single Payment is less than €10,000 and where individual entitlements are less than the District Electoral Division (DED) average. Allocations are capped at the DED average value of entitlements or a total Single Payment of €10,000 whichever is the lesser and allocations to successful applicants will not exceed €1,000. It is estimated that this measure is worth some €6m annually or €42m until 2012.

Compensatory Allowances

This is an area-based scheme but it incorporates the previous sheep headage scheme, which ceased in 2000.

Payments under this scheme to 27,000 farmers amounted €27.5m in that year.

Sheep Breeding

The Pedigree Sheep Breeding Programme as operated by my Department, in co-operation with the sheep breed societies, is currently being transferred to 'Sheep Ireland', a sister company of the Irish Cattle Breeding Federation (ICBF). An Interim Sheep Board has been established to manage and oversee the transfer. To facilitate this transfer and to allow for redevelopment of the breeding programme, funding of €163,000 has been provided so far in 2008. DAFF will provide further financial support to ICBF in 2009 for sheep breeding.

Carcass Classification

A trial to examine the feasibility of mechanical classification for lamb was conducted earlier this year at a cost of €135,000. Additional funding at a similar level may be made available to carry out additional feasibility work, if required, in 2009.

Quality Assurance

The Lamb Quality Assurance Scheme operated by an Bord Bia has 6,500 participants and involves spending of some €820,00 to date. It is hoped to expand this by a further 6,000 in 2009. This could involve spending of up to €1m depending on uptake.

State Agencies' Support

An Bord Bia spends in the region of €1m on the promotion of sheep and lamb at home and abroad per annum. Teagasc allocated in the region of €1.5m in 2007 and 2008 on sheep research activities. This also covers specialist staff for the sheep programme established following the Sheep Strategy Group's report. It does not include additional funding related to the advisory service, some of which would be directed towards sheep.